Zero fee currency conversion credit card

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Forums › Finance and wealth management › Zero fee currency conversion credit card

kiwijunglist

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#226345 3-Jan-2018 13:17

Hi.

Currently i use a ASB Platinum True Rewards credit card.

I often make online purchases in usd, usually using paypal.

They charge 2.1% foreign currency conversion offshore margins fee on overseas purchases.

Is there a better way to name purchases.

Can i direct transfer to paypal at a better rate or are there credit cards with 1% or less foreign fees. In Australia there are no conversion fer credit cards.

Thanks
Mike

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#1928489 3-Jan-2018 14:12

I bank with Westpac, I have NZ personal and business accounts; and in AU I have personal and business accounts.

Westpac NZ has a 2.5% foreign currency conversion fee, in Australia is it a 3.0% currency conversion fee.

I don’t know why you think there is no conversion fee on any credit card, but if there is I’d be interested as well.

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rendezvous

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#1928490 3-Jan-2018 14:18

From what I’ve seen, you come out worse off when using he PayPal currency conversion.

Amosnz

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#1928498 3-Jan-2018 14:47

We had one in Australia years ago, but we moved back to NZ.

https://www.latitudefinancial.com.au/credit-cards/#travel

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BlinkyBill

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#1928503 3-Jan-2018 15:01

Amosnz:
We had one in Australia years ago, but we moved back to NZ.

https://www.latitudefinancial.com.au/credit-cards/#travel

Latitude charges 3.0% currency conversion fee.

Amosnz

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#1928506 3-Jan-2018 15:05

BlinkyBill:
Amosnz:

We had one in Australia years ago, but we moved back to NZ.

https://www.latitudefinancial.com.au/credit-cards/#travel

Latitude charges 3.0% currency conversion fee.

Not on the 28 Degrees card I linked to. On one of the other cards, yes.

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sbiddle

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#1928510 3-Jan-2018 15:27

There are *some* cards in Australia that don't charge forex fees. The vast majority still do.

I've also seen evidence in the past to suggest that some of these are giving a worse exchange rate - ie while you're not paying any fees you're not getting charged at the bank midmarket rate for the transaction but were paying a slightly worse rate (but not the normal 2.5%). These cards are still a great deal if you buy a lot internationally.

There are no cards in NZ that I'm aware of that don't charge forex fees.

BlinkyBill

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#1928511 3-Jan-2018 15:31

Amosnz:
BlinkyBill:
Amosnz:

We had one in Australia years ago, but we moved back to NZ.

https://www.latitudefinancial.com.au/credit-cards/#travel

Latitude charges 3.0% currency conversion fee.

Not on the 28 Degrees card I linked to. On one of the other cards, yes.

Apologies, that is correct. Found one.

wellygary

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#1928514 3-Jan-2018 15:35

The majors inc paypal etc will get you one way or another,

Either you will incur a conversion charge, or they will give you a conversion rate that will include the charge as part of their overheads.

Your only real relief is to go to one of the fintechs like Transferwise or the like....

kiwijunglist

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#1928517 3-Jan-2018 15:40

I did a test today. Ge@rb35t $30.53 USD order.

G3arb35t conversion $44.42 NZD

Paypal conversion $44.75 NZD

ASB platinum true rewards VISA conversion $44.63 NZD

Additionally

Google search 43.13 NZD

Xe.com 43.1467 NZD

1 USD = 1.41326 NZD
1 NZD = 0.707586 USD

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sbiddle

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#1928620 3-Jan-2018 19:35

It's a little unfair to compare at the mid market rate rather than the bank rate though - you don't have access to mid market rates.

kiwijunglist

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#1928642 3-Jan-2018 20:43

Yes i know, but I just wanted to add mid market rate for comparison as the actual rate fluctuates daily, so without reference to the mid market rate, the other conversions rates are less meaningful.

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Torque

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#1929179 4-Jan-2018 16:50

I still have my 28 Degrees Mastercard from Oz (was run by GE, as per previous poster it's now Latitude) as well as Citibank accounts which have no currency conversion fees and seem to run off the interbank rate (or very near to!) which is a damn site better than the standard banking arrangements.

networkn

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#1929207 4-Jan-2018 17:17

You either pay conversion fees or worse exchange rates. Banks want their pound of flesh to make their billion dollar profits.

My wife has investigated a few times, and never found a solution worth switching too as the savings were very minor.

kiwijunglist

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#1929211 4-Jan-2018 17:20

I think it was interesting that currency conversion on the purchasing website was the best option.

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KiwiSurfer

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#1929264 4-Jan-2018 17:51

I'm going overseas later this year so I've been looking into (a) foreign cash and (b) local cards used for foreign purchases.

My observation as follows:-

1. No conversion fees when you load multi-currency cards (e.g. Qantas Cash, AirNZ OneSmart, Travelex's travel card products, etc). Also no conversion fees when transferring funds between currencies. However if you buy in a currency that has insufficient balance loaded then a >=2.5% conversion fee is charged (Travelex has one card with a 4.9% fee!).

2. 1% conversion fees for buying foreign cash from most banks. However Travelex has zero commission if you order online (among some other conditions which are not too onerous IMHO). Kiwibank also charges a flat rate of $10 which is good if you're buying >$1000. Surprisingly Travlex has a reasonable exchange rate for buying cash which sorts of puts the 'zero comission = worse exchange rate' theory under the spotlight.

3. Most credit cards charge 2.5% (with a number slightly below this). I'm mindful that the upside is you always 'get' excatly the amount of foreign currency you need and there is no hassle when you arrive back home converting your remaining cash back into NZD (and losing even more money) which might end up saving more in the long run depending on the amounts involved.

My current thinking is: I'm going to spend most of my time in the Eurozone. I'll load up my Qantas Cash card with Euros and use that for purchases. I'll order some Euro cash from Travelex and use that as a backup. Hopefully I'll use up all my Euro cash. The Qantas Cash balance can easily be converted back to NZD and cashed out.

Only trouble is I'm spending a few days in the Czech Republic which stubbornly wont adopt the Euro so will probably either convert any leftover Euros or withdraw at an ATM out of my Qantas Cash card.

Might not answer the OP's query but thought I'd share my recent research as food for thought as others might be interested.

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